Crispin Hull / Population, immigration and economics in a post-COVID Australia

crispin hull on population and economics

There was more fear-mongering, self-serving, and flawed guestimates over population this week – this time from the quintessential accountant and consultant to big business and government, KPMG.

Shock, horror, Australia’s population would be 1.1 million less by 2029-30 because of the reduction in immigration caused by COVID-19. That would be a “$117 billion” hit to the economy over the decade by dragging down economic growth, KPMG calculates. That would leave every Australian $2850 worse off each year, KPMG says.

So, KPMG and its big-business clients hope that the masses will be lulled into supporting a return to higher immigration. Well, let’s hope a bit of counter-propaganda will prevent that.

Even on KPMG’s figures, this hit to the Australian economy and therefore living standards of Australians is suspect.

KPMG’s says GDP would be $117 billion lower each year by 2029-30 if we do not have these 1.1 million extra people, and that would leave every one of the 28 million Australians by then $2850 worse off each year – that is a total of $79.8 billion, let’s say $80 billion.

Bear with me with the figures.

But if instead we have the extra immigrants, that $80 billion will not be “lost” because of the extra $117 billion in GDP the immigrants would provide. Take that $80 billion for the existing population away from KPMG’s $117 billion, it leaves $37 billion a year for the 1.1 million immigrants themselves, which comes to just $33,636 each immigrant per year, well below the Australian average income. So they are dragging their heels. They are a cost to the Australian community not an asset.

There is clearly something wrong with these “plucked-from-the-air” figures.

KPMG’s study looks at what would happen if there was no vaccine – and therefore no immigration – after one year and after two years.

It quite reasonably says if there is no vaccine “real GDP would be 5.5 per cent lower in every year from 2029-30 and beyond” compared to no “COVID-19 triggering a slowdown in immigration”. It says “a 5.5 per cent reduction in real GDP in 2029-30 alone is equivalent to $117 billion”.

But there is the huge logical problem here.

KPMG says that in a no-immigration environment caused by no vaccine, GDP would be 5.5% cent less. Yes, of course. But the 5.5% drop is not down to no immigration. Rather, it is down to all the other economically horrible things caused by a no-vaccine environment: closed businesses, closed borders, lack of confidence etc etc. But KPMG, to suit its own purposes, puts all of the lower GDP ($117 billion) down to no immigration and says the absence of immigration will cost every Australian $2850.

It ignores the following possibility: that a no-vaccine environment causes a 5.5% fall in GDP which is a lower fall than you would expect if Australia had also had to deal with costly high immigration and that if we had continued destructive high immigration in addition to COVID-19, we would have a 6% or 7% fall in GDP.

KPMG suggests that if we suddenly get a vaccine all we would have to do is allow 1.1 million immigrants in and the 5.5% GDP drop would disappear. This is delusional. In the post-COVID environment most of them would join the end of the dole queue in a profoundly shattered economy, just making things worse.

COVID aside, there are good grounds for concluding that the John Howard-inspired high-immigration policies since the late 1990s have cost Australians dearly, not just in economic terms but also in environmental and lifestyle costs.

It is all very well bringing in immigrants with their immediate incomes which add to overall GDP in the short-term. But GDP per head in the long term is cruelled by that. Schools, hospitals and transport infrastructure have to be built to accommodate them. That might be good for KPMG’s big-business clients just as their immediate consumption needs might similarly benefit them.

But it is not so good for existing residents. Increased congestion and agricultural and wilderness land being consumed by housing are just some of the costs.

High immigration has become a self-perpetuating myth. It was a great thing for Australia from 1945 to about 1970, but thereafter it should have been questioned, but was not.

The KPMG report is just another example of the myth. The KPMG report like so many other business-driven reports conclude that Australia should have higher immigration. If they were honest, they should say that higher immigration was the conclusion upon which they had based their assumptions, facts and arguments.

The KPMG report is just one more bit of a continuous stream of pro-population propaganda. Couched in statistics and the “science” of economics, it goes unchallenged especially by media that should do better: the ABC, SBS, The Sydney Morning Herald and The Age. They rarely if ever challenge high immigration because of a misguided fear of being branded racist or anti-multicultural.

You don’t have to agree with high immigration to prove you are not a racist or anti-mulitculturalism. You can do that by merely supporting Australia’s laudable non-race-based refugee intake.

But all KPMG and others have to do is throw in a few figures and statistics and the average semi-numerate journo swallows them like a python eating a rabbit – whole and undissected.

The fact is, existing multicultural communities have the most to lose from high immigration because it puts extra pressure on the very services they need most: public transport, translation services, schools, health services and so on.

COVID, of course, poses a real threat to the present pro-population Ponzi scheme. If Australia experiences a couple of years’ relief from the high-immigration, high-population mantra, ordinary people might like the result. There would be less pressure on schools, hospitals, public transport, housing costs and so on.

Suddenly, people might revolt against high immigration and high population growth which enriches the few at the expense of the many and at the expense of the natural environment and its non-human inhabitants.

Small wonder KPMG and others like them are serving up the scare-mongering manipulated figures they did this week – continuing to serve their big-business clients against the interests of the vast bulk of Australian residents.

Among the many things that Australians should question and change as a consequence of COVID-19, high immigration should be near the top of the list.

This article first appeared in The Canberra Times and other Australian media on 29 August 2020.

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